ZAM WANTS LOWER CORPORATE TAX FOR HIGHER INVESTMENTS
GOVERNMENT should lower Corporate Income Tax (CIT) for investment above US$500,000 located in the Multi Facility Economic Zone (MFEZ) to enhance Zambia’s growth trajectory.
This is according to the Zambia Association of Manufactures (ZAM) Chief Executive Officer, Florence Muleya’s expectations for the 2021 national budget.
Ms Muleya said the investments should be for manufacturers who invested US$500,000 and above in priority products and those that invest into the MFEZ.
Finance Minister, Bwalya Ng’andu, is expected to present the 2021 national budget to Parliament next week Friday.
“The Government should also in the 2021 budget grant manufacturers who invest US$500,000 and above in priority products and those that invest into the MFEZ a lower CIT rate of 15 percent to enhance Zambia’s growth trajectory,” Ms Muleya said.
Ms Muleya regretted that though Zambia’s manufacturing sector had been crying for reduced CIT rates, this request had not been granted.
She stressed that manufacturing CIT at 35 percent was too high and threatened the growth of the manufacturing sector, especially with the outbreak of Covid-19.
“In ZAM’s perception, the Covid-19 pandemic creates an opportunity for Government to attract better investment into the manufacturing sector by reducing the CIT rate from 35 percent to 25 percent,” Ms Muleya suggested.
Additionally, she said, various custom duties and excise duty rates on certain raw materials were still high and debar local value addition.
“Raw materials such as acrylic fibre at 15 percent duty, sheet steel at 25 percent duty, palm stearin at 15 percent duty, filler master batch at five percent, and bulk milk powder for further processing at 15 percent among others, should be removed or reduced to five percent.
“Besides the high excise duty rate on imported ethanol of 125 percent should be reduced to 60 percent while the excise duty rate on alcohol made from malt should be reduced from 40 percent to 30 percent,” Ms Muleya said.